Post offices could offer no-frills bank accounts this year

A “no-frills, low fees” bank account could be available in post offices later this year to “fill the gap” left by the country’s banks as they close rural branches, according to a major review.

“There’s an opportunity here for An Post to fill that gap,” said businessman, Bobby Kerr, who chaired the Post Office Network Business Development Group.

The basic payment account would offer debit cards and access to ATMs, along with standing order and direct debit facilities and internet, phone and app-based banking.

Postmasters would have to sign up, however, to new targets: “Commercial reality is where I come from. We’re going to have to look at this business with our commercial binoculars on. Sales targets are a reality. Performance of branches will be checked and measured,” he said.

The existing post office network is overly dependent on two State contracts – the Department of Social Protection social welfare contract and the NTMA State Savings contract, which provide 55 per cent of their revenue.

Seed funding

Minister for Communications Alex White said the Government backed the creation of the new accounts and had offered seed funding to get the project off the ground: “This is not about sentiment.

“It’s not about maintaining the network just for the sake of it. It is about building and continuing to build a sustainable business in the community for people who need it,” he said.

Welcoming the proposal, An Post chief executive Donal Connell said: “A banking product like this, I think, is going to be very interesting and very attractive. I think it’s going to be really good value, with low fees and transparent.”

Saying post offices have little prospect of survival unless they co-locate with services such as existing shops, the report said they must handle motor tax renewals and sell telephone, energy and financial services.

It recommends An Post develop a formal structure with the credit union movement to explore scope for link-ups between the two organisations.

Smaller post offices should not handle large sums of cash: “Evidence from the UK shows that there is no increased risk of theft or robbery as the safes preclude large amounts of cash to be withdrawn quickly,” the report states.

Lifeline for older customers

Postmaster Paddy McCann, from the small Fairymount post office and shop in Castlerea, Co Roscommon, said

the rural network provided a lifeline for older customers.

“There’s somebody to talk to. The financial institutions are closing their doors against the customer. They don’t want to know them. They want them pressing buttons,” said Mr McCann.

“You have to recognise your customers, respect them. They’re vitally important, whether they’re coming in just for a stamp, or whether they’re coming in for their pension or their transactions.”